Chipotle Mexican Grill is the creation of an American graduate Steve Ells in the year 1993. It is a restaurant chain in the fast casual sector currently found in 14000 locations in the United States, Canada and Europe. The food it shares is Mexican cuisine that includes tacos and burritos. This business is owned by the Steve Ells along with a board of three directors, who happened to be the class fellow of the founder. Since, its starts with USD 85000 owned by the father of CEO, company has seen the growth in million dollars’. Chipotle is an example of the providing the food with integrity which speaks about the company’s mission and values.
It is right to say CMG is the successful company as it applied the best practices developed by restaurant industry segments. From one restaurant Chipotle in 1995 expanded in thousands at various locations within the country. Due to its sustainable growth and profitability investors get attracted and started taking interest in this restaurant chain. It also becomes successful in grabbing the attention of giant McDonald which is known for its success in fast food sector. In 1988 both companies joined hands and come up with the growth strategies.
However in 2006, McDonald’s divested from Chipotle due to finding different culture and business plans. In the same year CMG made its Initial Public Offering and get the best response from investors. During 2000, Chipotle initiate to have the organic food raised by themselves their goal was to have antibiotic free products that help them detain their mission. Till date company has been successfully progressing with their mission to deliver food with integrity.
CMG Competitive Position
CMG has an added competitve edge with its philosophy of have naturally raised live stock. This also give an oppourtunity to farmer who believe in their philosophy to raised animals without using antibiotics, chemical and hormunes. This is what make them different from their competitors. Their dairy is obtained from the meadow raised cows and the company has been aiming to achieve the meat from field raised animals.
Chipotle applied the differentiation strategy to sustain its competitive position. After the food with safety; company does not believe in investing much in marketing compaigns. Their achievement is that their customer loyality and maketing as word of mouth. It is sucessful in securing competitive maketshare with its large target audience due to it’s products. It has been noted in findings that colors can increase purchases and create a stronger fondness of searching about it this resturant has it (Dupont, 2014).
Challenges to Chipotle
It is hard for any company to be away from the challenges like every business CMG does has areas that requires attention. Firstly, the company has its maturity over the years with its same plans since, it is all company owned and does not franchise it might face some financial challenges as stock price has also seen declined. The large number of stores makes it hard to guarantee that organization norms are met and kept up in this way a few outlets have lingered behind prompting humiliating episodes. Like report issued by media against gender discrimination and case of norovirus, reported by Health officials.
The company has also been implicated with the crime of employing people using fraudulent papers especially in its outlets in Minneapolis. In 2012, Jeff Einhorn a head of hedge fund gave a presentation on the company and its future prospect. A threat for the Chipotle is Taco Bell’s subsidy Cantina Bell menu that proved to be the replica of Chipotle. He further, said that Cantian Bell offer half of the price CMG ask to its customers. A survey concluded that customer of CMG have tried the Cantina Bell food and like it. Few customer assured that they will revert and buy from Cantina Bell.
In 2015, in reply to the challenges faced by the company those who looked for quality will come back to us said by the founder. What CMG does is not easy to replicate, and customer will soon realize the difference. Depressed economy has already strike the lower price products and businesses would be forced to raise the price to sustain the quality. Labor cost will also be increased that will affect the overall, business profits and growth strategy.
Recommendation and Conclusion
- Most of the companies step up product introductions so strong by putting efforts to increase an advertising level, and expand the channels of distribution internationally this strengthened the entry barrier by raising economies of scale and making access to distribution channels more difficult (Jennings, 2013). This has been found that they way they raise the product under ethical environment and product differentiation product will help them managing competitive position (Porter, 2016).
- Chipotle has a good corporate image and has la long term relationship with its suppliers which makes it easy for them to commit for expansion plans
- Their Marketing plan has revolutionized the restaurant industry to think on their way of doing business, they scarecrow detriment has made a mark.
Over all, as a big company the owners should restrict the expansion rather look for the current economic and political trend and continue they way they do business.
Dupont, A. M. (2014). An Examination of Chain Restaurants Exterior Colors and Logo Colors. University of New Hampshire Scholars’ Repository, 1–41. Retrieved from http://scholars.unh.edu/cgi/viewcontent.cgi?article=1170&context=honors
Jennings, L. (2013). Chipotle Mexican Grill. Nation’s Restaurant News, 47, 44. Retrieved from http://search.proquest.com/docview/1427280870?accountid=14549\nhttp://hl5yy6xn2p.search.serialssolutions.com/?genre=article&sid=ProQ:&atitle=Chipotle+Mexican+Grill&title=Nation’s+Restaurant+News&issn=00280518&date=2013-05-01&volume=47&issue=9&spage=44&aut
Porter, M. E. (2016). How Competitive Forces Shape Strategy. Retrieved from https://hbr.org/1979/03/how-competitive-forces-shape-strategy